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European Bitcoin ETPs See Increasing Outflows
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European Bitcoin exchange-traded products have suffered capital outflows every month this year, despite suppliers’ hopes raised by the approval of spot Bitcoin ETFs in the United States.
Bitcoin ETPs domiciled in Europe have lost $506 million since the start of this year, while other crypto ETPs have attracted small net inflows of $42 million, according to Morningstar data. The price of Bitcoin increased by approximately 40% during this period.
The results come as crypto product providers look to capitalize on institutional demand for digital assets, with the UK regulator approving the first listings of Bitcoin ETPs on the London Stock Exchange.
The European outflows contrast with the $13.4 billion in inflows enjoyed by crypto products domiciled in the United States, where the financial regulator approved the launch of spot bitcoin ETFs for the first time in January.
This article was previously published by Set Europe on firea title belonging to the FT group.
Pierre Debru, head of quantitative research and multi-asset solutions at WisdomTree, said the number of client inquiries for European crypto ETPs had “increased significantly” since the US launch, but this had not not yet translated into significant inflows.
Debru added that low fees charged by US Bitcoin ETFs had “created a new fee environment in Europe” by forcing European issuers to reduce their fees.
WisdomTree was one of several asset managers to significantly reduce fees on its Bitcoin ETPs following US launches, alongside Invesco and CoinShares.
Monika Calay, director of UK manager research at Morningstar, said understanding short-term Bitcoin fund flows this year “is not a simple task” and that market sentiment “remains fragmented.”
“Some see it as a hedge against inflation, others see it as a new currency, and many see it alongside other high-risk assets,” she said.
Calay added that the recent bitcoin halving, which saw the issuance rate of bitcoin cut in half in order to maintain its scarcity, was a “significant event” in the history of cryptocurrency that could “have a significant impact” on bitcoin ETP flows.
“Historically, such halving events have led to supply shocks, sparking both increased interest and speculation within the crypto community. [but] May has already seen a rally,” she said.
“As the narrative around bitcoin evolves, market participants must navigate the complexities and uncertainties surrounding this unique asset class,” she added.
US-based ETF provider VanEck said at the time of the launch of spot bitcoin ETFs in the US that it plans to be “more aggressive” in marketing its crypto products in Europe following the launches in UNITED STATES.
Martijn Rozemuller, managing director of VanEck’s European operations, said his company has seen a small net inflow to its Bitcoin and Ethereum exchange-traded notes this year.
These inflows occurred particularly during the period of the US approval decision and in recent months, where bitcoin and other crypto assets showed a “significant price recovery,” he said. declared.
The company’s European digital asset ETNs saw net inflows of €8.5 million in 2024, with assets reaching €650 million, according to Morningstar data.
“When considering the total potential market size, European crypto ETPs are still relatively larger than US spot bitcoin ETFs,” Rozemuller said.
Bitcoin ETPs in Europe managed assets of $6.4 billion at the end of April, while in the United States, funds held assets totaling $53.5 billion, according to Morningstar data.
*Ignites Europe is a news service published by FT Specialist aimed at professionals working in the asset management sector. Trials and subscriptions are available at igniteseurope.com.